FOR IMMEDIATE RELEASE
October 9, 2024
Natalia Abrams, Student Debt Crisis Center
Washington, DC — As of October 2024, the restart of student loan payments has left millions of student loan borrowers grappling with financial uncertainty. A new report from the Student Debt Crisis Center (SDCC) highlights significant challenges faced by borrowers, revealing alarming statistics that underscore the need for improved communication and support from student loan servicers. The report, A System in Disarray, follows a survey of 11,756 individuals detailing their experience with repayment since payments restarted in October 2023.
Key survey findings include:
Public Perception: 60% of borrowers believe the Biden Administration is pursuing legal pathways to debt cancellation; this is compared to 48% of borrowers last year.
Consolidation Efforts: Nearly half (46%) of borrowers have consolidated their loans to qualify for an Income-Driven Repayment (IDR) plan.
Lack of Awareness: A striking 60% of borrowers with defaulted loans are unaware of the now-expired Fresh Start initiative, a temporary program designed to bring defaulted loans back into good standing.
Unresponsive Servicers: Over half (55%) of borrowers who reached out to their loan servicers received no response, adding to their frustration and confusion.
Trust Issues: More than three-quarters (75%) of borrowers feel they cannot rely on their loan servicers for accurate information, highlighting a critical gap in communication and support.
Despite the efforts made by borrowers to navigate their student loan obligations, many are feeling overwhelmed and unsupported as all pandemic relief measures have come to an end. The survey underscores a systemic issue where essential information and assistance are not reaching those who need it most.
“Borrowers have done everything they can to prepare for repayment, yet the lack of reliable communication from servicers leaves them in a challenging position,” said Natalia Abrams, President and Founder of the Student Debt Crisis Center. “As payments restart, it’s crucial that we improve communication and support, empowering borrowers to navigate this daunting landscape and make informed decisions about their financial futures.”
Sabrina Calazans, Managing Director of SDCC, added, “These statistics are a wake-up call. Borrowers deserve access to reliable information and support, especially as they navigate the complexities of repayment. We must do better to help the millions of Americans saddled with student debt.”
The findings reflect a broader concern that, as borrowers attempt to restart payments, they are met with uncertainty and inadequate support. This situation is compounded by high costs of living, medical bills, and basic goods, making financial stability increasingly elusive.
The report calls for immediate action from policymakers, institutions, and loan servicers to ensure that borrowers receive accurate information, accessible resources, and the relief they are entitled to. Servicer accountability and transparency are critical to restoring trust and support in the student loan system.
As the landscape of student loans continues to evolve, SDCC urges all stakeholders to prioritize borrowers, including their education and advocacy. We must work together to help millions regain their financial stability and confidence.
For more information, to schedule an interview, or to request additional data, please contact Natalia Abrams at natalia@studentdebtcrisis.org.
To read the survey report and find quotes from borrowers, click here.
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ABOUT Student Debt Crisis Center
Student Debt Crisis Center is a national advocacy organization with over 2,000,000 supporters calling for fundamental reforms to student loan policies and an end to the student debt crisis. Learn more here.